If your business is interested in supplying goods or services to the Canadian government, understanding trade agreements and the thresholds that trigger them is essential. These thresholds determine whether your contract is subject to open competition rules under domestic or international trade deals.
This blog explains what trade agreements are, how they affect public procurement, and how you can prepare your business to take advantage of them.
What Are Trade Agreements?
Trade agreements are legal frameworks that Canada signs with other countries or trade blocs to promote fair, transparent, and competitive trade. In public procurement, they ensure that qualified businesses, both Canadian and foreign, have equal access to government contracts once certain monetary thresholds are reached.
These agreements require public buyers to:
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Advertise procurement opportunities
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Treat all bidders equally
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Follow non-discriminatory and transparent procedures
What Is a Procurement Threshold?
A procurement threshold is the minimum dollar value at which a trade agreement applies to a government purchase. If a contract value exceeds the threshold:
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The government must post the tender publicly
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All eligible businesses, whether domestic or international, can submit bids on equal terms
If the value falls below the threshold, buyers have more flexibility and may invite selected suppliers or use simplified processes.
Procurement Threshold Tables
Every two years, Canada updates the Procurement Thresholds at which federal departments, agencies, and Crown corporations must comply with obligations under various free trade agreements.
Table 1: Thresholds for Internal Agreements
(January 1, 2024 – December 31, 2025, values in CAD)
| Free Trade Agreement | Entities (Goods / Services / Construction) | Crown Corporations (Goods / Services / Construction) |
|---|---|---|
| Canadian Free Trade Agreement (CFTA) | $33,400 / $133,800 / $133,800 | $668,800 / $668,800 / $6,685,000 |
Table 2: Thresholds for International Agreements
(January 1, 2024 – December 31, 2025, values in CAD)
| Free Trade Agreement | Entities (Goods / Services / Construction) | Crown Corporations (Goods / Services / Construction) |
|---|---|---|
| Canada–Chile Free Trade Agreement | $134,300 / $134,300 / $8,800,000 | $671,500 / $671,500 / $21,400,000 |
| CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) | $229,600 / $229,600 / $8,800,000 | $627,200 / $627,200 / $8,800,000 |
| Canada–Colombia Free Trade Agreement | $134,300 / $134,300 / $8,800,000 | $671,500 / $671,500 / $21,400,000 |
| Canada–European Union Comprehensive Economic and Trade Agreement (CETA) | $229,600 / $229,600 / $8,800,000 | Section A: $627,200 / Section B: $706,700 / $8,800,000 |
| Canada–Honduras Free Trade Agreement | $134,300 / $134,300 / $8,800,000 | $671,500 / $671,500 / $21,400,000 |
| Canada–Korea Free Trade Agreement | $100,000 / $100,000 / $8,800,000 | Not Applicable |
| Canada–Panama Free Trade Agreement | $134,300 / $134,300 / $8,800,000 | $671,500 / $671,500 / $21,400,000 |
| Canada–Peru Free Trade Agreement | $167,800 / $167,800 / $8,800,000 | $671,500 / $671,500 / $21,400,000 |
| Canada–Ukraine Free Trade Agreement | $229,600 / $229,600 / $8,800,000 | $627,200 / $627,200 / $8,800,000 |
| Canada–United Kingdom Trade Continuity Agreement | $229,600 / $229,600 / $8,800,000 | Section A: $627,200 / Section B: $706,700 / $8,800,000 |
| World Trade Organization Agreement on Government Procurement (WTO-GPA) | $229,600 / $229,600 / $8,800,000 | $627,200 / $627,200 / $8,800,000 |
How Does This Affect Your Business?
If you are bidding on a public contract, here is what trade agreements mean for you:
1. More Opportunities with More Competition
Cross-border competition increases once a contract surpasses the applicable threshold. You may find yourself competing with companies from Europe, Asia, or Latin America.
2. Transparency and Equal Access
Once a threshold is met, the government is required to:
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Publish the tender
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Provide clear evaluation criteria
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Treat all qualified bidders fairly
This ensures a level playing field and reduces preferential or closed bidding practices.
3. Predictability in the Process
Trade agreements establish standardized procurement rules. This provides a more predictable and secure environment for businesses that want to compete.
How to Prepare as a Supplier
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Monitor Tender Portals
Track postings and opportunities on Government Portals or at BidWatch Search. -
Get Prequalified
For larger contracts, register with supplier databases such as the Supplier Registration Information system. -
Be Ready to Compete
Make sure your proposals meet all outlined criteria and legal requirements. Attention to detail is especially important when international obligations apply. -
Get Support
At BidWatch Canada, we help you navigate the complexities of public procurement by providing expert guidance and valuable resources from our procurement specialists.
Final Thoughts
Trade agreements give Canadian businesses broader access to procurement opportunities, both domestically and internationally. At the same time, they introduce rules and thresholds that must be understood to compete effectively.
Need Help?
Navigating the complexities of trade agreements and procurement thresholds can be challenging. At BidWatch Canada, our procurement specialists are here to support your success by providing expert guidance in areas such as:
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Supplier registration
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Compliance with procurement rules
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Proposal writing and bid strategy
👉 Contact us today if you want one-on-one guidance or to explore our bidding support packages.
- BidWatch Canada Team